Tony Pasin (Barker, Liberal Party) Share this | Hansard source

I rise this evening to speak on the Health Insurance Amendment (Safety Net) Bill 2015. The bill introduces a new Medicare safety net to replace three legislative mechanisms: the Extended Medicare Safety Net, the original Medicare safety net and the Greatest Permissible Gap.

Our Medicare system is exceptional; it is world leading. It delivers to our citizens a guarantee of universal health care. It is a guarantee that, sadly, the majority of people who occupy this earth do not enjoy. Whilst our government is fully committed to maintaining this as a permanent feature in Australian public policy, to do so we must continue to revisit it, reform it and enable it to serve us today and tomorrow and to serve the lives of our children and grandchildren.

Just like every piece of government policy, there is a cost to the taxpayer. Nothing, as they say, is free. Budgetary forecasts see Medicare costs scheduled to grow to around $23 billion by the year ending 30 June 2017. Medicare, indeed, is the fourth most expensive program after payments to the states, support for seniors—mainly the age pension—and family tax benefits.

This significant cost needs to be seen within our overall health care spend, which is estimated to reach around $75 billion by the financial year 2016-17. These are serious financial commitments to our citizens. Yet it is absolutely essential that we maintain our comprehensive and effective health care system and its standards. The health care of our citizens is clearly a priority of this government. Whilst we are committed to a comprehensive health care system, we remain equally committed to one that is sustainable into the future. This government has continually looked for inefficiencies in the system and has been diligent in rectifying them once identified.

The Health Insurance Amendment (Safety Net) Bill is part of that constant process of revision and reform that we have committed to. We have consistently taken steps to remove unnecessary duplication from all systems, in particular the healthcare system. The purpose of this bill is to consolidate the complex Medicare safety net arrangements and to introduce a new Medicare safety net that will continue to provide assistance to singles and families with out-of-pocket costs for out-of-hospital Medicare services. In doing so, this government will achieve a saving to the taxpayer of $266.7 million over five years.

There is an unnecessary duplication across the current arrangements. Currently, the system assists families with their expenses for medical services through the extended Medicare safety net, the original Medicare safety net and the Greatest Permissible Gap.    Across these three legislative schemes there are provisions to assist with out-of-pocket expenses. The services assisted include GP and specialist attendances and services provided in private clinics and private emergency departments. Of the three arrangements, the extended Medicare safety net accounts for the majority of the expenditure. This bill seeks to streamline these three overlapping schemes and, in doing so, make the system more efficient while retaining the overall aim of such a safety net: assisting families with out-of-pocket expenses and enabling better health care outcomes.

The status quo is complicated and confusing. Whilst the existing safety nets share the same intention they have often overlapping operation and concurrently have varying degrees of applicability. Consistent with this government's approach to legislation across the board we have taken a common-sense approach to this state of affairs, and we are taking steps in this bill to clear up the confusion surrounding safety nets in the health care space.

The current arrangements are also inconsistent. There is a limit on safety net benefits that will be paid for some, but not all, out-of-pocket hospital services. Some of these limits are fixed dollar amounts while others are based on a percentage of the Medicare fee. This inconsistency in arrangements can be confusing for patients and medical practitioners. The Medicare system should be set up to assist our citizens—not to stand in their way.

Previously in this chamber I have spoken on the Health Legislation Amendment (eHealth) Bill 2015 which this government enacted earlier this year. That bill focuses on bringing the way we administer our health care system into the 21st century and deliver efficiencies in patient management. In the same fashion, through streamlining the existing safety nets into one comprehensive arrangement this government is delivering a better Medicare system which is geared to achieving a better service for our citizenry.

The current arrangements simply do not meet those goals. Whilst the vast majority of doctors charge reasonable fees for their services, some doctors and service providers have, disappointingly, used the extended Medicare safety net to underwrite excessive fees. This has increased patients' out-of-pocket costs in some areas. Evidence of this behaviour was found in two independent reviews of the extended Medicare safety net in 2009 and 2011 which were undertaken by the Centre for Health Economics Research and Evaluation from the University of Technology, Sydney. Both reviews found that the extended Medicare safety net program had the unintended consequence of increasing the fees charged by doctors and that the majority of the benefits available were being paid to people living in high-income areas rather than to people with significant medical conditions. The 2009 review found that for some services, for every dollar spent through the extended Medicare safety net, more than 78c was going to health providers in the form of increased fees, whilst only 22c, or 22 per cent, was assisting patients with their costs. 1t is the view of this government that such a state of affairs is not the desired outcome. The taxpayer deserves more for the taxpayer dollar, and that is why this bill takes steps to simplify the system and address this anomaly.

Echoing the concerns of the Minister for Health, I agree that previous attempts to reform the system have added levels of complexity rather than dealing with the core issues. Changes have contributed to confusion, have added to the complexity of the overall Medicare program and have not addressed the issues sufficiently. At the moment, medical services are not uniformly capped, which means excessive fee inflation can still occur to services that are uncapped. For example, immediately after the capping of the safety net benefit for a cataract surgery service, the provider fee for an anaesthetic for cataract surgery increased greatly—in some cases by almost 400 per cent. Furthermore, some people reach their threshold almost immediately due to the unlimited amount of out-of-pocket costs that count towards the threshold. This makes the consumer relatively insensitive to the further fees charged, allowing for fee inflation. We must take steps to deliver better value for money in this space.

To protect Medicare for posterity, it is important to consider whether elements of the Medicare program are having their desired consequences. The time is right to replace the complex and inefficient Medicare safety net arrangements with a new Medicare safety net, one that is clearer and simpler. The new Medicare safety net will strengthen the system for patients into the future while contributing to a more sustainable Medicare system overall. Its design has been informed by the findings of two independent reviews; ongoing consultation with the medical profession since the introduction of the extended Medicare safety net in 2004; and concerns raised by patients.

The new Medicare safety net will continue to cover up to 80 per cent of out-of-pocket costs once an annual threshold is met. However, it will introduce a limit on the total amount of out-of-pocket costs for out-of-hospital Medicare services to be included in the costs that accumulate to towards that threshold. There are currently upper limits on the amount of safety net benefits which will be paid for some items. The new Medicare safety net legislation introduces uniform benefit caps across all items. Medical expenses for in-hospital Medicare services will continue not to be relevant for the purposes of the Medicare safety net.

This government has taken an informed position on this bill. It has delivered a more comprehensive and consistent safety net which ensures the government can continue to support singles and families experiencing high out-of-pocket costs because of particular medical events. It does this whilst streamlining the Medicare safety net arrangements and, most importantly, contributing to the sustainability of our world-leading Medicare system. I commend the bill to the House.

See this speech in context